shareholders equity Flashcards
When issuing Treasury stock at less than par
First till amount is 0 it will come from TS then Retained Earnings
Stock options stock rights and stock warrants
stock options exercised by employees stock rights exercised by shareholders . All are of different names but used to get more shares
Intrinsic method
When fair value of the stock cannot be measured by any other method the entity will measure fair value of the stock by intrinsic method
Cliff vesting
Options vest 100% at once or after 5 years of service
Graded Vesting
Employees are vested 20 % after three years until they are vested 100% after 7 years
Measurement date
Grant date
Dates which are relevant to dividend
Declaration Date, record date,payment date
Various types of dividends
Cash, property,Scrip,liquidating, Stock,stock Split
What are dividends which don’t reduce stockholders equity
Stock dividends and stock splits
Quasi reorganization
fresh start cr retained earnings and assets which are overvalued and debit C/S and APIC
property dividend
will be declared at FMV at the date of declaration
prior period adjustment
is net of tax
B.V of Common Stock
Total stockholders equity-preferred=$/C.S O/S
What are the three methods of accounting of TS under IFRS
cost par and constructive retirement method
Contra equity
reduction of total equity O/S
General Rule
If youhave a plug you never credit retained earnings . But you can debit it
parvalue
contra C/S
Under Par Value method
T/S is for par value
Cost method vs method-
Under the cost method TS will always be debited and credited for all transactions. You will not see APIC CS.
When repurchasing stock- Under cost method- just debit cash and credit Tresury Stock. Under par value method, Debit apic commonstock for the amount less par also debt treasury stock for par credit cash for the amount received . Then credit cash for the amount received and credit APIC treasury for plug.
Resell is like a new issuance istead of instead of credit cs we will credit ts for par.
pre emptive right
the preemptive right safeguards a shareholders proportionate owenership. It is the right to purchase prorate amount of new issuance of stock
property dividend
property dividend is declared at fair value at the valuation date
